- Initial Statement of Beneficial Ownership (3)

FORM 3	UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES	OMB APPROVAL OMB Number: 3235-0104 Expires: February 28, 2011 Estimated average burden hours per response... 0.5
	Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

1. Name and Address of Reporting Person * ARROWGRASS CAPITAL PARTNERS (US) LP	2. Date of Event Requiring Statement (MM/DD/YYYY) 10/30/2009	3. Issuer Name and Ticker or Trading Symbol Prospect Acquisition Corp [PAX]
(Last)        (First)        (Middle) 245 PARK AVENUE, 39TH FLOOR	4. Relationship of Reporting Person(s) to Issuer (Check all applicable) _____ Director                            _____ 10% Owner _____ Officer (give title below)          ___ X ___ Other (specify below) / See Remarks
(Street) NEW YORK, NY 10167        (City)              (State)              (Zip)	5. If Amendment, Date Original Filed (MM/DD/YYYY)	6. Individual or Joint/Group Filing (Check Applicable Line) ___ Form filed by One Reporting Person _ X _ Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1.Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common stock, par value $0.0001 (the "Common Stock")	1386338	I   (1)	See footnote   (1)

Table II - Derivative Securities Beneficially Owned ( e.g. , puts, calls, warrants, options, convertible securities)
1. Title of Derivate Security (Instr. 4)	2. Date Exercisable and Expiration Date (MM/DD/YYYY)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
	Date Exercisable	Expiration Date	Title	Amount or Number of Shares

Explanation of Responses:

( 1)

Arrowgrass Capital Partners (US) LP, a Delaware limited partnership ("ACP"), acts as the investment manager for Arrowgrass Master Fund Ltd., a Cayman Islands exempted company ("AMF"), which holds the shares of Common Stock. ACP acts as the investment manager of AMF and may be deemed, as of the date hereof, to be the beneficial owner of the Issuer's securities held by AMF. Arrowgrass Capital Services (US) Inc., a Delaware corporation, is the general partner of ACP. ACP and ACS do not hold directly any of the Issuer's securities or derivative securities with respect thereto, and disclaim any beneficial ownership of any of the Issuer's securities reported or excluded herein for purposes of Rule 16a-1(a) under the Securities Exchange Act of 1934, as amended, except for their pecuniary interest therein.

Remarks: ACP and ACS may be deemed to be members of a 10% group with The Malibu Companies, LLC, a California limited liability company ("Malibu") and certain of its affiliates (the "Malibu Reporting Persons") by virtue of the fact that AMF entered into an Option Agreement with Malibu, as more fully described in the Schedule 13D filed by the Reporting Persons on the date hereof. Although the Reporting Persons and the Malibu Reporting Persons may be deemed to be a "group" with each other within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, the Reporting Persons do not believe that they are part of a group with the Malibu Reporting Persons and expressly disclaim membership in any "group" with the Malibu. The Reporting Persons expressly disclaim beneficial ownership of any shares of Common Stock that may be deemed to be beneficially owned by the Malibu Reporting Persons.

Reporting Owners
Reporting Owner Name / Address	Relationships
	Director	10% Owner	Officer	Other
ARROWGRASS CAPITAL PARTNERS (US) LP 245 PARK AVENUE, 39TH FLOOR NEW YORK, NY 10167				See Remarks
Arrowgrass Capital Services (US) Inc. 245 PARK AVENUE, 39TH FLOOR NEW YORK, NY 10167				See Remarks

Signatures
ARROWGRASS CAPITAL PARTNERS (US) LP, By: Arrowgrass Capital Services (US) Inc., its General Partner, By: /s/ Sean Flynn, Director		11/9/2009
** Signature of Reporting Person		Date

Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
*	If the form is filed by more than one reporting person, see Instruction 5(b)(v).
**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note:	File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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